Ignorance is NOT Bliss

There was an article published the other day in Epoch Times titled “Most Americans lose $180,000 in Social Security Benefits Due to a Key Mistake”.  In a nutshell the premise is that by claiming early they miss out on significant benefits over their lifetime.  Nothing earth shattering here, it’s been my premise since I started consulting on Social Security claiming strategies over 10 years ago.  What was surprising was the reader responses to the article!

As of now there are over 600 responses to the article, but here is the tone and consensus.

  • Fake News! Do the math yourself! Don’t rely on Government BS.  Most higher income people need to reach their early 80’s to make more waiting.  When life expectancy is 78 and dropping you see the scam.
  • A bird in the hand is better than two in the bush. Can’t collect if your dead.
  • Age discrimination is rampant in this country, try staying employed until 70.
  • This story sounds like Government propaganda to Save Money by delaying.
  • Social Security is a Ponzi scheme.
  • Most Americans are dead before they reach 70!
  • This article is misleading. Take your money ASAP!
  • With COVID jabs reducing life expectancy, less will have to be paid out.
  • If you wait till your 70 there might not be ANY Social Security benefits left.
  • Take it before 70. Who knows how long you will live.
  • They are counting on you dying before you collect anything if you wait.
  • Social Security is a government socialist scam since inception. The government is always the winner in this scam game.
  • My doctor friend Ricardo is the same age as me. He did the math and figured we’d be in our 90’s before we were ahead!  We went ahead and took the money.
  • All is well and good, if you live to 70 – – – too many people don’t these days!
  • I want my money back! I’m taking it at 62.  I could die and then I wouldn’t get any of my money back.

Did you notice the degree of vitriol and skepticism in their comments.  They don’t trust the government and they don’t think they’ll live very long.  I usually don’t comment upon articles like this but took it upon myself to see what kind of responses I’d receive.  My post was over 24 hours ago, and all of the comments above were posted after mine.   Here is my comment;

  • The biggest risk in retirement is living too long, not dying too soon!
  • Whatever your check is at age 62 it’s DOUBLE at age 70 assuming a 2% COLA
  • You worked 40 years to get X $, does it make sense to wait 8 more years to get X times 2
  • The breakeven is 10 years, once again assuming a 2% COLA
  • The COLA next year is 8.7%, would you like 8.7% on $2,000 assuming you claimed at 62 or $4,000 if you waited until age 70?
  • The difference in cumulative benefits over an average life expectancy can easily surpass $300,000 for a couple.
  • Surviving spouses inherit the greater of the two benefits upon the death of the other, thus the higher earning spouse should delay until age 70 and possibly have the lower earning spouse claim early thus hedging the longevity bet!
  • Delaying Social Security is the best annuity you can buy!
  • Use other assets first especially IRA type investment accounts that are not earning 8% guaranteed. Bonds don’t pay that amount and the stock markets are down 20 – 30% YTD.
  • Don’t waste low tax brackets, great opportunity to plan withdrawals from qualified plans.
  • The difference in monthly checks at age 90 for a high earner can be $3,000 per month or $36,000 for a year.
  • If you and your spouse are 65 years of age that is a great likelihood that one of you will live to age 90+. My mother turns 96 in January.

Only 2 people commented upon my post and both gave me a thumbs up, I should be happy no one gave me a thumbs down.   I think the bottom line is that most people do not understand all the nuances of Social Security and they are greatly pessimistic as to its solvency and their own longevity!  Finally, I also suspect that very few Americans integrate the Social Security claiming decision with all their other assets, which includes work!

God willing, I think I’ll be quite busy, continuing to advise CPA’s, Financial Advisors and their clients for years to come, based upon this article and the comments associated with it.  Never hesitate to reach out, if you think I can be of assistance.

Happy Holidays!

Dave Zander, CFP®
MLS# 1603774